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BNP Paribas banking news worries former ITF member

Former U.S. Tennis Association president and ITF board member Franklin Johnson said news involving French banking giant BNP Paribas has him concerned for the sport, but feels the Indian Wells event should be fine throughout the terms of their title sponsorship agreement which runs through 2018.

Former U.S. Tennis Association president and ITF board member Franklin Johnson said news involving French banking giant BNP Paribas has him concerned for the sport, but feels the Indian Wells event should be fine throughout the terms of their title sponsorship agreement which runs through 2018.

"I haven't been following it that closely other than reading the newspapers about it," Johnson said. "Obviously, it's of great concern."

France's largest bank faces a potential $10 billion U.S. fine for business with Iran and other sanctioned nations. According to Bloomberg Businessweek, the fine could wipe out this year's profit by BNP, estimated by analysts at 5.65 billion euros, or $7.7 billion. It brings up questions if BNP would be forced to cut back on sponsorships of sports and cultural events.

A $10 billion dollar fine could be slapped on BNP Paribas over allegations it evaded US sanctions, according to reports. At that amount, the penalty would be one of the biggest ever imposed on a bank. David Pollard reports
Reuters

For four decades, BNP Paribas has been the top benefactor of tennis, sponsoring the French Open, Davis Cup as well as the BNP Paribas Open in Indian Wells.

"I just know how important they are with the ITF. They're close and they've been very supportive," said Johnson, who helped prevent the Indian Wells tournament from moving to Shanghai back in 2006. "They've just been wonderful in terms of their support. Anything negative that happens to them is of great concern."

Johnson was part of the Indian Wells ownership group when BNP Paribas was signed on as title sponsor in 2009. The deal with the Indian Wells event was for five years, with a five-year option that was picked up. For the length of contract, Johnson feels the Indian Wells event will be fine.

"BNP Paribas is an enormous bank. I don't know if things are so dire that they would go out of business," Johnson said. "They would have to cut back on things, but there's an existing contract, so they would have to honor their contract. The question is if it will come up for renewal, will they back off."

In the Bloomberg story, BNP spokeswoman Isabelle Wolff declined to comment on the consequences of the U.S. prode on its tennis sponsorships.

Indian Wells had a similar situation back in 2001.

The men's ATP Tour entered a $1.2 billion marketing agreement with ISL Worldwide. Indian Wells relinquished it's title sponsorship with Newsweek magazine so ISL could control the branding of the tournament and the other eight ATP Tournaments then called the Super 9 and the year-end championship.

In 2001, ISL went bankrupt and had to buyout it's contracts. Indian Wells was left in a difficult situation because it had just built the Indian Wells Tennis Garden and was dealing with a huge mortgage that was supposed to largely funded by the contract. Johnson, as president of the USTA, helped the tournament create a syndicate to buyout it's partners in 2006 to prevent the tournament from moving to Shanghai.

Asked if there could be another buyout of the title sponsorship agreement by BNP Paribas, Johnson said, "I don't forsee that happening."

The ISL buyout created a turbulent decade for the tournament, where twice it had to consider a sale to overseas investors, who would move the event. But the Indian Wells event appears to be on solid grounds after Oracle founder and CEO Larry Ellison bought the tournament and Indian Wells Tennis Garden for a reported $100 million in 2009.

Ellison's purchase was months after BNP Paribas was signed on as the title sponsor. Forbes magazine lists Ellison, 69, as the fifth richest man in the world with a net worth of 51.5 billion.